Grosvenor Property Developers Ltd (in liquidation) v Portner Law Ltd [2025] EWHC 2362 (Ch) involved a successful claim by a company in liquidation against its former solicitor for dishonest assistance in connection with fiduciary breaches by two former directors, Mr Varma and Mr England. The breaches arose out of two property transactions and one property-related loan.

This decision is highly relevant to insolvency practitioners (IPs) because it demonstrates how claims can be successfully brought on behalf of insolvent companies against third parties who have dishonestly assisted former directors in breaching their fiduciary duties.

Annecto Legal can assist insolvency professionals in finding the right funding and insurance to pursue directors. Litigation finance, funding arrangements and insurance allow insolvency practitioners to pursue claims on behalf of their clients whilst reducing financial risks. There are a wide range of products in the market, and Annecto can help identity the right options for any insolvency dispute – as well as ensuring IPs meet their regulatory requirements in exploring the market.

Background of the case

Grosvenor Property Developers Ltd (“Grosvenor”) entered liquidation following concerns about transactions carried out by its former directors, Mr Varma and Mr England. These included two property conveyances and a loan, all handled by Portner Law Ltd, with Mr Broughton acting as the firm’s conveyancing solicitor.

The liquidator alleged that Portner Law had dishonestly assisted the directors’ breaches of fiduciary duty by facilitating transactions that were not in the company’s interests and by ignoring clear warning signs. The firms accepted that it would be vicariously liable if dishonesty was established but argued that Mr Broughton had merely been careless, not dishonest, and also challenged the quantum of the claim.

The test for dishonesty

The case therefore turned on whether Mr Broughton’s conduct met the objective test for dishonesty set out in Royal Brunei Airlines v Tan and Ivey v Genting Casinos, including whether his action amounted to “blind eye” dishonesty.

As clarified in Ivey v Genting Casinos, the court must first identify the individual’s actual belief or knowledge of the facts (a subjective step), and then determine whether their conduct was objectively dishonest, regardless of whether they appreciated it as such.

“Blind eye” dishonesty and legal responsibility

The deputy High Court judge, Saira Salimi, drew heavily on Gruppo Torras v Al-Sabah, which dealt with “blind eye” dishonesty – where a professional suspects impropriety but deliberately avoids confirming it.

Similarly, in this case, the court found no evidence that Mr Broughton had actual knowledge of the underlying fraud. However, he deliberately failed to carry out basic checks to ensure compliance or ask questions that any honest solicitor would have asked, amounting to “Nelsonian dishonesty”.

Findings against the solicitor

The court identified several serious professional failings:

1. Failure to distinguish between clients and related parties – Mr Broughton conflated his client, the client’s father, and a company owned by the father, despite their differing interests. His conduct went beyond carelessness, showing a “complete disregard for professional obligations”.
2. Turning a blind eye to financial evidence – He accepted unverified claims of family wealth and a “gifted” source of funds, despite acknowledging the need for supporting documentation.
3. Non-compliance with anti-money laundering obligations – He ignored the Money Laundering Regulations 2017, the Law Society AML Practice Note 2013, and his own firm’s internal policies.
4. Failure in professional responsibility – As the firm’s Deputy Anti-Money Laundering Officer, Mr Broughton had a heightened duty of vigilance. Yet, he admitted to routinely skipping attendance notes and falsely confirming that AML checks had been carried out. 

The court’s conclusion

The deputy judge found that Mr Broughton’s conduct represented a pattern of disregard for his duties and repeated failures to act with honesty or integrity. His actions amounted to dishonest assistance in the directors’ breaches of fiduciary duty.

She also rejected any suggestion of mitigation based on workload or lack of personal gain, noting that the dishonesty arose from a conscious decision to cut corners and avoid scrutiny of clients’ finances.

The issue of quantum (the amount of loss recoverable) was deferred for later consideration.

The case is a strong precedent for insolvency practitioners seeking to maximise recoveries and hold third-party professionals accountable when company funds have been misused. It reinforces that turning a blind eye is no defence – and that professional facilitators can and will be pursued alongside culpable directors. 

However, litigation is of course inherently risky and uncertain, and so managing adverse costs exposure – and finding the right funding options – is vital in pursuing any claim, including litigating against professionals for either negligence or dishonest assistance.

Insolvency litigation funding options

Litigation funding, the assignment of claims and/or ATE insurance can play a pivotal role in assisting insolvency practitioners (IPs) in meeting their obligations. IPs involved in insolvency litigation can make use of the following methods:

After-the-event (ATE) legal expenses insurance – ATE insurance is generally used to protect from adverse costs risks, Security for Costs, and Cross Undertakings in Damages. After-the-Event (ATE) legal expenses insurance is perhaps best thought as a similar to a ‘swap’. For either no upfront fee or a small upfront fee, the insurer takes on all of the risk of the potential adverse costs award.

The claimant has swapped their obligation to pay the defendants in the event of a loss, with the obligation to pay the insurer in the event of a win. This ‘swap’ is generally an attractive swap as the client is likely to be in a better financial position following a win than following a loss. Also, the payment to the insurer will only be a percentage of the adverse costs rather than the whole amount.

For insolvency disputes, insurers will often defer all premium payments until financial recovery is made in the claim. Premium will be capped at a maximum of recovered funds.

Third party litigation funding – In some cases, third party litigation funders may be willing to provide funding for a claim in exchange for a share of any financial settlement or damages awarded. This option can be attractive when there are no funds to pursue a strong case. ATE insurance is often used in conjunction with this type of funding.

Assignment of litigation – Some types of disputes can be assigned to a third party, usually for an upfront payment and a share of recoveries (after costs). This model can be useful in smaller cases when the ATE and CFA model would not deliver value. But giving up control can sometimes be costly, especially on larger disputes.

How can Annecto Legal assist?

When handling insolvency matters, insolvency practitioners are obligated to explore all options available in such cases. At Annecto Legal, we assist a wide range of clients in finding the appropriate insolvency litigation funding, assignment options and ATE insurance.

Annecto Legal regularly assists licensed insolvency practitioners who are involved in dealing with dishonesty and breaches of fiduciary duty. If you are in the process of bringing or defending an insolvency dispute and want to find out whether we can assist in helping you fulfil your obligations and secure the right deal, then contact Annecto Legal now.